Resmed, the Healthcare sector company, was revisited by a Wall Street analyst today. Analyst David Bailey from Morgan Stanley maintained a Buy rating on the stock and has a $305.00 price target.
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David Bailey has given his Buy rating due to a combination of factors that suggest potential growth for Resmed. Despite the potential challenges posed by the US CMS Competitive Bidding program, which could impact average selling prices and earnings starting from FY28, the current market conditions and strategic positioning of Resmed appear favorable.
The revised reimbursement methodology, while potentially leading to lower DME reimbursement rates, is not expected to take effect until 2028, providing Resmed with time to adapt. Additionally, the company’s current market valuation and price target indicate a 19% upside, suggesting that the stock is undervalued at its current price of $255.83. These factors combined with the anticipation of further details on product categories in the competitive bidding program contribute to a positive outlook for Resmed’s stock.